Mumbai: Global banking major HSBC Tuesday said rising oil consumption, and not gold import, is the real culprit that is pushing up India's current account deficit (CAD) to record high.

"The biggest risk to the exchange rate is the current account deficit (CAD) which is almost entirely on account of oil imports. But I know all the focus is on gold," HSBC head of global markets for India Hitendra Dave told reporters here.

The comments come on the back of raging debate over rising gold import and its impact on CAD, which hit a record high of 5.4 percent in second quarter.

Both the Reserve Bank as well as the government have taken a slew of steps to curtail gold demand. They are also planning to launch financial instruments which reduce the need to physically import the yellow metal.

The oil bill, which stood at USD 140 billion in FY'12, will come down only if crude prices go down by 10-12 percent and the rupee is constant. Both are not happening, Dave said.

India imports over 70 percent of its oil demand.

"Oil is the biggest risk, the other inputs could be coal...May be the energy basket," he said, underplaying the role of gold imports leading to higher CAD.

Gold imports constituted around 35 percent of CAD (difference between exports of goods, services and total imports) in FY12 when it stood at 4.2 percent. RBI has said CAD was a big concern vis-a-vis macroeconomic stability.

Another reason for the rising trade deficit is exports, which have been falling all through the current fiscal, Dave said. Higher input costs, wages and falling rupee make our exports non-competitive, he said.

On fiscal deficit, the other key deficit number on the radar, HSBC's chief economist for India and Asean Leif Eskesen said the government will find it difficult to meet the 5.3 percent target this fiscal and narrowing it further to 4.8 percent of GDP next fiscal will be a challenge.

The government is working over time to trim expenditure to meet the desired mark for FY13 and cannot afford to go on an overdrive of populist measures if it were to rein it at 4.8 percent for FY14, he said.

The process of reforms and fiscal consolidation will, however, continue and be visible in the forthcoming Budget, Eskesen said.